Sales of state-held shares suspended as prices stay low

The government suspended plans to sell stock it owns, as it draws up guidelines to address legislature concerns that some of the country's biggest state-controlled companies may be sold at fire-sale prices.

"We're suspending it for the moment," Andy Liou, a press secretary for the Cabinet, said of asset disposal.

The government will resume stock sales after the Cabinet approves the new guidelines, he said, without giving a timetable.

The legislature passed a resolution asking for the sales halt. Some legislators said they are worried about state companies falling into the hands of conglomerates and workers' rights being abused when companies pass into private ownership.

The government last month said it plans to raise about NT$180 billion (US$5.3 billion) selling shares it holds in state-run companies. The money is needed because the administration of President Chen Shui-bian (陳水扁) is facing a record budget deficit of NT$304 billion this year and national debt at an all-time high of more than NT$3 trillion.

Stakes in Chunghwa Telecom Co (中華電信), the largest phone company, and China Steel Corp (中鋼), the nation's biggest steelmaker, are among assets on the sale list. The last major government stock sale on record was US$815 million of global depositary receipts last October.

The government may sell as much as NT$30 billion of bonds exchangeable into state-held shares for the first time.